Item 4. Controls and Procedures
Item
4. Controls and Procedures.
Evaluation
of Disclosure Controls and Procedures
We
maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports
we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s
rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer,
as appropriate to allow timely decisions regarding required disclosure.
As
required by Rule 13a-15(b) under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of
our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of
our disclosure controls and procedures as of March 31, 2026. Based on the foregoing, our Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures were not effective as of March 31, 2026, due to the material weaknesses
in our internal control over financial reporting described below.
Material
Weaknesses in Internal Control Over Financial Reporting
As
previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, management identified material weaknesses
in the following components of the COSO framework: control environment, risk assessment, control activities, information and communication,
and monitoring. Specifically, the material weaknesses identified relate to the fact that the Company has not yet designed and maintained
an effective control environment commensurate with its financial reporting requirements, including: (a) the Company has not yet completed
formally documenting policies and procedures with respect to review, supervision, and monitoring of the Company’s accounting and
reporting functions; (b) lack of evidence to support the performance of controls and the adequacy of review procedures, including the
completeness and accuracy of information used in the performance of controls; and (c) the Company has limited accounting personnel and
other supervisory resources necessary to adequately execute its accounting processes and address its internal controls over financial
reporting.
Plan
for Remediation
To
remediate these material weaknesses, management has implemented or is in the process of implementing the following measures: (i) hiring
additional accounting personnel with appropriate technical expertise in U.S. GAAP and SEC reporting; (ii) enhancing internal review procedures
for complex accounting transactions; (iii) providing targeted training to existing finance staff on U.S. GAAP and SEC reporting requirements;
and (iv) upgrading to NetSuite’s enterprise resource planning system to improve the consistency and accuracy of financial data
and reporting processes. Management will continue to monitor the effectiveness of these remediation efforts. However, the material weaknesses
will not be considered fully remediated until the applicable controls operate effectively for a sufficient period of time and management
has concluded, through testing, that these controls are operating effectively.
Changes
in Internal Control Over Financial Reporting
There
have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange
Act) during the three months ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting, other than the remediation measures described above that remain in progress.
34
PART
II—OTHER INFORMATION
Item
1. Legal Proceedings.
None.
Item
1A. Risk Factors.
Except
with respect to the Company’s on-going liquidity needs, there were no material changes in the risk factors we previously disclosed
in Item 1A to Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 20, 2026.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.